I'm the Founder and Managing Partner of Ironfire Capital LLC, which runs a tech-focused hedge fund and angel fund. I did a Ph.D. in Management at the Columbia University Graduate School of Business in New York, with a specialization in Strategic Management. You can follow me on Twitter @ericjackson, subscribe to me on Facebook, follow me on Sina Weibo, or Circle me on Google+. My email is: dr.eric.jackson@me.com

Is Facebook Already Making Instagram Uncool?

With 13 guys, they built something that – according to ComScore – more people spend time on using their mobile phones than Twitter. They now have over 100 million registered users.

Instagram became so popular that Facebook (FB) bought them for $1 billion (less now that part of the price that was in Facebook stock and has declined since April).

I said in April that I believed Facebook was in trouble in the long-term because it was fundamentally a web company and didn’t have mobile in its DNA. Other companies like Twitter and Instagram were born as mobile companies.

That might seem like a small thing, but I believe it is a fundamentally different perspective and one that Facebook can’t just acquire any more than a leopard can change his spots.

After Facebook bought Instagram, some told me that this was a good example of how Facebook was going to “solve” its “mobile problem.” They can just use their large cash stockpile and inflated stock price to buy any mobile companies that are potentially threatening to them like Instagram.

And, if mobile’s so different from the Web, people like Instagram’s founder Kevin Systrom can just tutor Mark Zuckerberg to get him up the curve.

But it’s like arguing that Facebook has a type of cancer and it can fix that by buying a healthy arm and strapping it on to itself to fix the problem. Buying a strong mobile company like Instagram doesn’t make Facebook a strong mobile company.

This week we saw a small but irrefutable sign that Facebook is starting to Facebookify Instagram. They have launched Instagram Pages. It basically creates a website for Instagram.

Another way of saying it, Facebook is recreating Instagram as it would have looked like if it had been born in 2006 instead of 2010. It would have been a website first, and a native iOS app would have followed much later.

What’s the big deal? After all, it’s going to lead to more web traffic which can be monetized with Facebook ads running on the right-hand side of the web screen. I’m sure that’s what Zuckerberg and others in Facebook management thought. After all, Facebook just paid one-quarter of what George Lucas got from Disney (DIS) for his life’s work, so they have a right to make some money from it.

The trouble is that Facebook is not understanding part of what made Instagram “cool” in the first place.

Users want a different experience from their mobile apps than they previously did from their websites.

Part of Instagram’s appeal to its “community” was that you were connected to your friends and could quickly and easily swap photos which you could like and comment on. It was never meant to be a big website where anyone could go to and troll around and through your history of photos. Frankly, it’s a little creepy Facebook.

There have been other little changes. Probably in response to the increased war between Instagram/Facebook and Twitter, Instagram no longer allows your @ Twitter handle to be linked to in Twitter when you share a photo from Instagram to Twitter. In other words, Instagram doesn’t want Twitter to get a traffic bump off the backs of Instagram’s photos being shared there. Yet, you still get all the benefits of seeing other users’ handles if you access Instagram photos within their app. (Thanks to TheStreet’s Rocco Pendola for pointing this out.)

With each of these moves, Facebook is chipping away at what made Instagram so cool and popular to begin with. It’s going to annoy users who will look to a new photo sharing service that Twitter will launch soon, Yahoo!’s (YHOO) Flickr, and possibly what Apple (AAPL) might launch as alternatives.

Part of what makes the shift for web companies like Facebook to a new competitive landscape like mobile so difficult is that the mindset sees the two spheres (mobile and web) as similar when they’re subtly but powerfully different.

Another big part of what makes the shift tough is that it’s hard to turn your back on a core product (web) that has made you successful and – more importantly – on which you depend for meeting financial targets. You can’t just turn your back on a money machine, especially when you’re feeling enormous pressure from Wall Street.

But, in making these “little” decisions and telling yourself and others that it’s no big deal, you systematically tear the foundation of what made these services like Instagram cool in the first place. And, over time, users move on to something else which hasn’t made any compromises and provides a better service.

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The world is ADDICTED to Facebook. It is picture based communications and its voyeristic as heck. They might as well have a camera on me at all times and everyone can watch.

Facebook is now all ads. Everything is an AD. You are the AD. If you so much as look at a page Facebook is now broadcasting that to all your friends and getting paid for it. And you dont even see it happening cause its broadcast to your friends and not to YOU !

“Eric Jackson likes Starbucks”

“Eric Jackson likes BMW”

“Eric Jackson likes NY Knicks”

“Eric Jackson likes Samsung Galaxy SIII”

It’s shocking how invasive it is.

Click something, look at something, you dont even have to PRESS “LIKE” anymore and Smile….YOUR AN AD.

Today I saw an AD including names of people I dont even know who aren’t on my profile and arent on anyone I know’s profile.

So you will be an AD on everyone’s page… not just your friends and familys’.

Tie some location into that and anything you do will be broadcast. Talk about BIG BROTHER.

Again Desktop version is just an alternative before people complain why there is no web version now they have but it soesnt necessarily the main feature. Better to have it available rather than nothing at all besides people are used to instagram as MOBILE APP. The same as facebook they both have mobile and web version we are talking about accessibility and flexibility. So if you are talking about not cool i think they are cooler now